Aristophanes

U.K. Begins Quantitative Easing

On Mar 13 03:43 PM Adrienne Gonzalez wrote:

> Dirk,
>
> Zimbabwe is a convenient reference to any attempt by any central
> bank to "stimulate" via the printing press.

The historical data suggests Japan is a more accurate reference.

Right now you get two opinions about inflating the money supply in this crisis in Western countries:

1) It will automatically lead to inflation, even hyper-inflation. This is an economic law. Buy real gold. Get a firearm.

2) It will do nothing, except maybe shave some deflation, as we saw with Japan. This is the historic reality. Germany did something similar when absorbing East Germany and the economic effects were not inflationary.

I go with the latter because that's what the data suggests. We've had enough theories gone wrong in this crisis, it's time to look at some facts. Comparing modern, Western nations to Zimbabwe or Weimar Germany is to miss decades of history and massive structural differences.